THE pound to euro exchange rate has jumped to a two-month high, as markets anticipated an interest rate rise could come as soon as November, after an update from the from the Bank of England's Monetary Policy Committee (MPC) and comments from Gertjan Vlieghe.

Sterling is now at around 1.1386 against the eurozone currency, as markets digest the interest rate decision and update from the Bank of England - as well as fresh comments from MPC member Gertjan Vlieghe.

The pound tends to strengthen when the chance of an interest rate increase is higher.

Amid soaring inflation and low unemployment, only two of the nine MPC members - Michael Saunders and Ian McCafferty - voted for an immediate base rate hike from 0.25 per cent to 0.5 per cent.

But Mr Vlieghe today said: "If these data trends of reducing slack, rising pay pressure, strengthening household spending and robust global growth continue, the appropriate time for a rise in Bank Rate might be as early as in the coming months."

Its furter hints that a rate rise is coming, after the MPC yesterday said that "some withdrawal of monetary stimulus is likely to be appropriate over the coming months in order to return inflation sustainably to target".

Connor Campbell, financial analyst at Spreadex.com, said: "Comments from MPC member Gertjan Vlieghe has only given the currency further reason to get geared up for a rate hike before the end of the year.

"Vlieghe – traditionally a dove – stated that a rise could come ‘as early as in the coming months’ and that though he once thought ‘the appropriate response of monetary policy was to be patient’ the ‘evolution of data’ is increasingly taking the central bank to the point of action.

"Sterling certainly wasn’t shy in its reaction to the comments."

It's thought Bank of England chief economist this month Andy Haldane and Governor Mark Carney could also soon vote for a rate hike in the coming months, following previous comments.

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The pound increased against the euro ahead of the MPC interest rate update

Maike Currie, investment director for personal investing at Fidelity International, said: “It’s now almost a decade since the Bank of England first took the knife to rates and despite talk about a rate hike being around the corner, it comes as little surprise that the Bank of England’s Monetary Policy Committee (MPC) is still in no rush to raise rates from their historic lows, with a majority 7-2 members voting to hold rates at 0.25 per cent."

But the chance of a rate hike appears to have jumped after the MPC minutes showed that committee members felt that rates will rise sooner than the market expect.

A statement from the MPC said: "All MPC members continue to judge that, if the economy follows a path broadly consistent with the August Inflation Report central projection, then monetary policy could need to be tightened by a somewhat greater extent over the forecast period than current market expectations."

Inflation hit 2.9 per cent in August - well above the Bank's target of two per cent.

Raising interest rates can help push inflation down - taking pressure off British households.

Unemployment has also reached a 42-year low, suggesting the economy remains strong - and wage rises may soon start to pick up.

The factors all suggest the Bank of England could now be finally ending the decade of record low interest rates, according to experts.

Kathleen Brooks, research director at City Index, said: "If the Bank of England won’t step in to ease the pressure on the consumer now, then when will it?"

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Ben Brettell, senior economist at Hargreaves Lansdown, said: "As we have come to expect from the Bank of England, the no-change decision was delivered alongside some hawkish rhetoric in the meeting minutes."The majority of members feel a withdrawal of stimulus will be appropriate in the coming months, as slack in the economy is being absorbed more rapidly than expected.

"Sterling gained almost a cent against the dollar on these comments, while the FTSE shed around 30 points.

"Yet this isn’t anything we haven’t heard before from the Bank.

"Policymakers have continually warned rates may have to rise sooner than the market expects, while at the same time doggedly sitting on their hands."